Order: 2012-11-13

Served November 15, 2012

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 15th day of November, 2012

Essential Air Service at 

MACON, GEORGIA

Under 49 U.S.C. 41731 et seq. 

DOCKET DOT-OST-2007-28671

 

ORDER ESTABLISHING HOLD-IN SUBSIDY RATE 

Summary

By this Order, the Department of Transportation authorizes compensation to Pacific Wings, 

L.L.C. d/b/a Georgia Skies (“Pacific Wings”) for providing Essential Air Service (“EAS”) at 

Macon, Georgia, beyond the air carrier’s 90-day notice of its intent to terminate its unsubsidized 

EAS at the community. 

Background

Macon is guaranteed to receive at least a minimum level of air service under the EAS program 

by virtue of the fact that it appeared on a certificated carrier’s Civil Aeronautics Board-issued 

certificate on October 24, 1978, the date the Airline Deregulation Act of 1978 was signed into 

law. (See 49 U.S.C. 41731-41744 for the EAS program’s governing statutes). By Order 

2008-5-43, issued on June 3, 2008, the Department selected Pacific Wings to provide EAS at the 

community for the two-year period through September 30, 2010, for $1,386,306 annual subsidy.

By Order 2010-10-5, issued on October 7, 2010, we extended that rate until further Department 

action. That service consisted of 26 round trips a week, operated with 9-seat Cessna 208-B 

aircraft.

On April 26, 2012, Pacific Wings filed a 90-day notice of its intent to terminate its unsubsidized 

service at Macon, effective July 26, 2012. By Order 2012-5-25, issued on May 24, 2012, the 

Department prohibited Pacific Wings from suspending service at Macon and requested 

proposals, with subsidy if necessary, from air carriers interested in providing replacement 

service. In response to that Order, we received two proposals. 
2

By Order 2012-9-6, issued on September 6, 2012, the Department selected Sun Air Express, 

L.L.C. d/b/a Sun Air International to provide subsidized EAS at Macon for a two-year contract. 

However, replacement service will not commence before the end of the current hold-in period. 

Therefore, in accordance with 49 U.S.C. § 41734(c), we must extend the service obligations of 

Pacific Wings until replacement service actually begins. 

By letter dated September 13, 2012, Pacific Wings requested compensation for providing EAS 

beginning on the 91st day after it filed its notice to suspend service, i.e. July 26, 2012, and 

continuing through the hold-in period. The compensation requested is equal to the compensation 

agreed upon in the previous carrier-selection case at Macon, which was conducted under 

competitive conditions.1

Pacific Wings is eligible to receive compensation on the 91st day following the air carrier’s letter 

of intent to cease operations, which in this case is July 26, 2012. Pursuant to 49 U.S.C. 

§ 41734(d), the Department will provide compensation to Pacific Wings until Sun Air 

commences service at Macon. We find both the service and subsidy levels of Pacific Wings to 

be reasonable. 

 

This Order is issued under the authority assigned in 14 CFR Part 1.56(a). 

ACCORDINGLY,

1. The Department authorizes compensation to Pacific Wings, L.L.C. d/b/a Georgia Skies, for 

providing Essential Air Service at Macon, Georgia, as described in Appendix A, from 

July 26, 2012, until further Department action; 

2. The Department directs Pacific Wings, L.L.C., d/b/a Georgia Skies, to retain all books, 

records, and other source and summary documentation to support subsidy claims for payment, 

and to preserve and maintain such documentation in a manner that readily permits its audit and 

examination by representatives of the Department. Such documentation shall be retained for 

seven years from the date of service of this Order, or until the Department indicates that the 

records may be destroyed, whichever comes first. Copies of flight logs for aircraft sold or 

disposed of must be retained. The air carrier may forfeit its compensation for any claim that is 

not supported under the terms of this Order; 

3. Docket DOT-OST-2007-28671 will remain open until further Order of the Department; and

 1 See Order 2008-5-43, issued on June 3, 2008. 
3

4. The Department will serve a copy of this Order on Pacific Wings, L.L.C., d/b/a Georgia 

Skies.

By:

SUSAN L. KURLAND

Assistant Secretary

for Aviation and International Affairs

(SEAL)

An electronic version of this document is available on the World Wide Web at

http://www.regulations.gov
Appendix A

PACIFIC WINGS, LLC. d/b/a GEORGIA SKIES

ANNUAL COMPENSATION REQUIREMENT FOR ESSENTIAL AIR SERVICE AT

MACON, GEORGIA

Effective period: July 26, 2012, until further Department action.

Service: 26 nonstop round trips per week to Atlanta

Aircraft type: Cessna 208B aircraft (9 seats)

Timing of flights: No upline or intermediate service is permitted without prior

Department approval. Flights must be well-timed and well spaced

in order to ensure full compensation.

Annual compensation: $1,386,306

Subsidy Rate Per

Arrival/Departure: $5231

Weekly Compensation

Ceiling:2 $27,1963

 1 Annual compensation of $1,386,306 divided by 2,650 annual arrivals and departures calculated as

follows: 52 flights per week x 52 weeks x 98% completion = 2,650.

2 This rate assumes an annual completion factor of 98 percent. A compensation ceiling is to be applied

per calendar week such that service above that ceiling in one week cannot make up for service shortfalls 

in another week.

3 Subsidy rate per arrival/departure of $523 multiplied by 52 eligible arrivals and departures.
Appendix B

General Terms and Conditions for Essential Air Service

The carrier understands that it may forfeit its compensation for any flights that it does not operate 

in conformance with the terms and stipulations of the rate order, including the service plans 

outlined in the order and any other significant elements of the required service, without prior 

approval. The carrier understands that an aircraft take-off and landing at its scheduled 

destination constitutes a completed flight; absent an explanation supporting subsidy eligibility 

for a flight that has not been completed, such as certain weather cancellations, only completed 

flights are considered eligible for subsidy. In addition, if the carrier does not schedule or operate 

its flights in full conformance with the order for a significant period, it may jeopardize its entire 

subsidy claim for the period in question. If the carrier contemplates any such changes beyond 

the scope of the order during the applicable period of these rates, it must first notify the Office of 

Aviation Analysis in writing and receive written approval from the Department to be ensured of 

full compensation. Should circumstances warrant, the Department may locate and select a 

replacement carrier to provide service on these routes. The carrier must complete all flights that 

can be safely operated; flights that overfly points for lack of traffic will not be compensated. In 

determining whether subsidy payment for a deviating flight should be adjusted or disallowed, the 

Department will consider the extent to which the goals of the program are met and the extent of 

access to the national air transportation system provided to the community.

If the Department unilaterally, either partially or completely, terminates or reduces payments for 

service or changes service requirements at a specific location provided for under this order, then, 

at the end of the period for which the Department does make payments in the stipulated amounts 

or at the stipulated service levels, the carrier may cease to provide service to that specific 

location without regard to any requirement for notice of such cessation. Those adjustments in 

the levels of subsidy and/or service that are mutually agreed to in writing by the Department and 

carrier do not constitute a total or partial reduction or cessation of payment.

Subsidy contracts are subject to, and incorporate by reference, relevant statutes and Department 

regulations, as they may be amended from time to time. However, any such statutes, regulations, 

or amendments thereto shall not operate to controvert the foregoing paragraph.

Funds are not currently available for performance under this order beyond September 30, 2012. 

The Government's obligation for performance under this order beyond September 30, 2012, is 

contingent upon the availability of appropriated funds from which payment for services can be 

made. No legal liability on the part of the Government for any payment may arise for 

performance under this order beyond September 30, 2012, until funds are made available to the 

Department for performance. If funds are not made available for performance beyond 

September 30, 2012, the carrier will receive notice in writing by the Department.

All claims for payment must be submitted within 60 days of the last day of service provided 

under this order.